Dow futures plunge over 500 points as Trump declares Iran ceasefire 'over'

US stock index futures tumbled on Wednesday, July 8, while oil prices surged after President Donald Trump said the ceasefire with Iran was "over," signaling a renewed escalation in West Asia tensions that rattled global markets.

Dow Jones Industrial Average (DJIA) futures fell over 500 points, or 1.2%, while S&P 500 futures declined 1%. Tech-heavy Nasdaq 100 futures also traded lower as investors moved away from riskier assets.

Oil prices rallied sharply on fears of supply disruptions. Brent crude climbed more than 6% to around $78.7 a barrel, while US West Texas Intermediate (WTI) rose over 6% to about $74.7 a barrel.

The rally in crude lifted energy stocks in premarket trading, with the Energy Select Sector SPDR Fund (XLE) gaining more than 2%. Shares of Diamondback Energy, Occidental Petroleum and Valero Energy were among the top gainers.

The renewed market volatility came after Trump, speaking at the NATO summit in Ankara, said the ceasefire between Washington and Tehran was "over," following fresh hostilities in the region.

Earlier, US Central Command said the United States had launched a "series of powerful strikes" against Iran in response to attacks on three commercial vessels in the Strait of Hormuz.

The US Treasury also revoked a licence that had allowed Iran to sell oil globally.

Iran's foreign ministry on Wednesday described the US strikes as a "gross violation" of the memorandum of understanding signed between the two countries last month to end the conflict.

Investors are also awaiting the minutes of the Federal Reserve's June policy meeting, due later in the day, for further clues on the US interest rate outlook after policymakers left rates unchanged while indicating inflation risks remain.